Authorities are struggling to cope with more than 100,000 people who have fled Sri Lanka's war zone, aid agencies say, while fighting has blocked the Red Cross from evacuating wounded people and delivering aid.

The military said a four-day exodus was beginning to slow, with some 103,000 people having come to army-held areas since troops cleared an earthen barrier it said the Liberation Tigers of Tamil Eelam (LTTE) had built to stop them escaping.

The International Committee of the Red Cross (ICRC) said fighting had blocked the evacuation of wounded by sea and the delivery of aid supplies by a ship.

"We are negotiating with the parties in terms of having a safe area around the boats to allow the fishermen to bring the wounded to us," ICRC spokesman Simon Schorno said in Geneva.

The ICRC lowered its estimate of civilians still trapped in a narrow coastal strip on the island's north to less than 50,000. The navy could not immediately be reached for comment.

Military spokesman Brigadier Udaya Nanayakkara said operations to finish Asia's longest-running war would not let up, adding troops were moving toward the rebel pocket where the LTTE's leader, Vellupillai Prabhakaran, is believed to be hiding.

Mr Nanayakkara denied LTTE accusations that troops were using artillery.

"We are not using heavy weapons at all. We are only using small arms," he said.

Independent confirmation of battlefield accounts is difficult because outsiders are generally restricted from it.

'Dire straits'

The UN Security Council said it had "deep concern" for the welfare of those remaining inside the LTTE-held area, which is surrounded by troops.

The military says troops now control all but 13 square kilometres of the Indian Ocean island, where the LTTE is fighting a last stand in their war to create a separate state for the Tamil minority.

United Nations spokesman Gordon Weiss said the world body had confirmed that between 90,000 and 100,000 people had left the combat zone since Monday (local time). They will join 80,000 people already in refugee camps away from the front.

"There is serious overcrowding in the camps and it is only to get worse in coming days," Mr Weiss said in Colombo.

"It is a huge exodus and it threatens to overwhelm the available systems."

Sri Lankan Foreign Minister Rohitha Bogollagama acknowledged the "situation was less than ideal" and urged outside help at a meeting with foreign diplomats, the Foreign Ministry said.

The United Nations said it had appealed for $US155 million to help meet the immediate needs of the swelling refugee population, but said less than a third had been received.

People who had fled have been on foot for days and stuck in the war zone with minimal food, water or medical care, aid agencies said.

A former rebel spokesman, Daya Master, was being interrogated after he became the most senior rebel to surrender so far when he turned himself in the day before, Mr Nanayakkara said.